ExxonMobil's Kurdistan Gamble

An adviser to the Resources Minister of the Kurdistan Regional Government (KRG) confirmed on Friday that ExxonMobil has signed agreements to explore for oil and gas in six blocks in Iraqi Kurdistan, according to Dow Jones.

This is big news, as the Baghdad government has previously excluded companies operating in the Kurdish region from oil contracts in the rest of the country; as recently as September Baghdad excluded Hess Corp from participation in the fourth energy licensing round because of its contracts with the KRG.

ExxonMobil is already producing around 370,000 barrels a day of oil from the West Qurna field, under a service contract with the Baghdad government.

According to Reuters, Iraq's government told ExxonMobil last month that any oil exploration contract it signed with the KRG would be illegal and could result in termination of its West Qurna contract, warning of "dire consequences".

(Sources: Reuters, Dow Jones, Financial Times)


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